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Macdonald told 'don't shilly-shally'

Former resources minister Ian Macdonald was in the witness box at the ICAC inquiry Tuesday where he was forced to explain why decisions he made led to the family of Eddie Obeid making millions of dollars.

''You're a crook.'' It was with these words ringing in his ears that the disgraced former mining minister Ian Macdonald left a corruption hearing after a second torrid day in the witness box.

After spending time putting 39 coincidences to Mr Macdonald connecting his actions with millions in profits that flowed to the former powerbroker Eddie Obeid and his family, counsel assisting the Independent Commission Against Corruption, Geoffrey Watson, SC, cut to the chase.

Throughout the day Mr Macdonald was chastised by Commissioner David Ipp for failing to answer questions. ''Don't shilly-shally!'' said the commissioner.

''Look, Mr Macdonald, what I really want to put to you is that in fact you're a crook.'' He went on to say that Mr Macdonald ''agreed with Eddie Obeid and his family'' to create the Mount Penny tenement, which stands to enrich the Obeids by up to $175 million. To date the Obeids have received $30 million, which has been used to buy houses and luxury cars for Mr Obeid, his wife, Judith, and their nine children, the inquiry has heard.

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''That's an absolute lie . . . and just said for the benefit of the Fairfax press,'' retorted Mr Macdonald.

Mr Watson pressed on. ''Can I just put another five reasons why I suggest you're a crook? They start with this, it's because the decisions which you made are so irresponsible, so bad for the people of NSW there was no proper basis ever for making them.''

The first reason given by Mr Watson was that in 2008 Mr Macdonald pushed through the 2008 coal tender at the heart of the corruption inquiry with ''an inappropriate degree of urgency''. Evidence had been given that departmental staff warned against issuing a tenement at Mount Penny, which was ''smack bang'' over the Obeids' farm, because further exploration was needed to establish the amount of coal.

Mr Watson said taxpayers received ''nil, nothing, zero'' in the form of additional financial contributions paid in respect of the Mount Penny tenement.

Mr Macdonald countered, saying it was because of the global financial crisis. ''I didn't do the GFC. The GFC killed everything,'' he said.

Secondly, Mr Macdonald had been ''irresponsible'' in eliminating bigger companies by issuing invitation-only tenders to small mining companies.

The commission has heard these small firms, some of which were $2 companies connected to the Obeids, did not have the financial resources to extract coal.

These junior miners made quick profits by on-selling to the larger companies originally denied access to the tender.

Mr Macdonald denied anything was wrong with this process, saying, ''All junior miners are junior at the beginning, they can grow like any other company''.

''The third mad aspect of the decision you made was the carve up of North Bylong,'' said Mr Watson, who alleged Mr Macdonald had ordered a much larger tenement be redrawn and downsized so it covered ''like a blanket'' three properties the Obeids had acquired after receiving inside information, allegedly from Mr Macdonald, about the forthcoming government coal tender.

Fourthly, taxpayers were deprived of substantial revenue because none of the companies involved in Mr Macdonald's 2008 tender paid any ''additional financial contribution'' to the state.

''And the fifth reason . . . you're corrupt is your failure to reveal the involvement of the Obeid family,'' suggested Mr Watson. Earlier Mr Macdonald admitted he had failed to reveal the involvement of the Obeids in the coal tender to the public, the cabinet or to the Labor Party.

Mr Macdonald said he had no idea about the Obeids having land affected by the Mount Penny tenement until he read it in the paper. He said he was ''terribly upset'' and ''absolutely surprised'' over the Obeids' failure to tell him they had land included in a government tender.

But he then confirmed that not only had he stayed in close contact with Mr Obeid and his family after he left politics but that he and the Obeids had pursued coal deals in Indonesia.

''After I left Parliament, we fell on some difficult times, in terms of trying to get some business going and some work,'' he said. ''We endeavoured to take a group of partners to do some work in Indonesia.''

The inquiry has heard Mr Macdonald was to receive $4 million from the sale of Cascade Coal, which won the Mount Penny tender, but that the sale did not eventuate.

''These days I do cleaning and work associated with a shop,'' he said.

It was also suggested that in July 2008, immediately after providing Moses Obeid with a list of companies which were going to be invited to tender for coal licences, the Obeids provided Mr Macdonald with rent-free accommodation at the family's $700-a-night ski lodge, The Stables, in Perisher.

As well, Mr Macdonald left the Obeids with two meal bills totalling more than $800.

Mr Macdonald said he had no idea his meal bills had been paid using Judith Obeid's loan account in Obeid Family Trust No. 1.